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AARP says feds will give us more $$$ to restore Gregoire cuts

Post by News Tribune Staff on Jan. 24, 2009 at 6:37 pm with No Comments »
January 24, 2009 6:37 pm

Our Washington, D.C. correspondent, Les Blumenthal, reported this past week that Washington is in line to get $2 billion in additional Medicaid money from Congress — at least, under the U.S. House of Representatives’ plan.

Jerry Reilly, who is one of the advocates for the poor and elderly (sometimes they are the same people) down here in Olympia, passed on some numbers that were crunched by the American Association of Retired Persons.

Here is a state by state estimate.

The totals are estimated to be $68-82 billion nationwide.

That the first block of type is from Jerry. The second one is from AARP.

Gov. Chris Gregoire assumed the state would get $780 million from President Barack Obama and Congress, in additional Medicaid, when she proposed her 2009-11 budget in mid-December. Now it appears Washington could be more — between $1.34 billion and $.98 billion — and could therefore restore some of the other cuts she was proposing to make.

Among those cuts was $415 million to eliminate General Assistance Unemployable and ADATSA, a similar program (with drug treatment) for homeless, and about $42 million for the Adult Day Health program. Of course, that would be up to the Legislature, assuming Congress gives them the leeway.

It also appears some fed funds would be retroactive to October 2008, the beginning of the federal fiscal year.

Reports out of D.C. say Obama expects Congress to pass the economic stimulus package in mid-February.

Here’s Jerry’s e-mail:

FYI- Please review the new Federal Medicaid funding estimates obtained by AARP as reported in letter below.

There are clearly sufficient funds (more that $500 million) coming in increased federal medicaid dollars under the stimulus package to fully restore the Adult Day Health program and many of the other devastating reductions to poor peoples’ health care programs that were proposed by the Governor before she knew the full impact of increased federal support.

The challenge will be to make sure that these dollars be put to use in Medicaid and other health care programs for the poor, and not be siphoned off to meet other state needs. The US Congress is attempting to maintain the essential safety net programs that poor people will need now more than ever, and at the same time maintain the thousands of jobs involved in helping to provide these benefits and services.

Jerry Reilly

The following letter is from an AARP person.

Dear Friends and Colleagues,

I am sharing some new analysis estimating potential federal Medicaid funds for the state of Washington that I thought you would find of interest -

According to analysis completed for AARP by Health Management Associates

HMA) of the economic recovery legislation that the House of Representatives will consider next week -

Washington State would receive $1.34 billion in federal Medicaid matching funds (FMAP) over 27 months, October 2008 – December 2010.

House leaders say the bill provides $87 billion in total additional funding for state Medicaid costs (FMAP), with a minimum 4.9% increase in the match rate for every state and additional increase based on unemployment rates over time. A conservative estimate of how that would affect each state (by Health Management Associates, HMA) suggests that states will receive at least $68 billion, while a more liberal estimate by the Center on Budget and Policy Priorities (CBPP) suggests the total to states will equal at least $82.3 billion.

Attached is a spread sheet that compares the estimated state-by-state impacts provided by both HMA and CBPP. Understanding this range of estimates is important, given the uncertainty around future unemployment rates. HMA’s estimates are “conservative” in the sense that they don’t attempt to estimate job losses after December 2008, which would increase the FMAP stimulus a state would be entitled to in a future quarter. CBPP published on January 22, 2009 “illustrative [higher] estimates of the amount of assistance each state would potentially receive, based on projections of future economic conditions.”

Either way – both of these estimates are significantly higher than the approximately $800 million assumed in the Governor’s budget. At the state level, any incoming federal Medicaid funds should stay within health and long term care and not dispersed to other areas of the budget.

Yesterday the economic recovery legislation was heard by the House Energy and Commerce Committee. They did not strengthen existing Maintenance of Effort language that would require states to maintain existing Medicaid eligibility but not existing Medicaid benefits in order to receive new FMAP funds. Strong opposition to this change remains. The debate will continue in the Senate.

FYI – I am also attaching a recent AARP letter to the hill on this topic.

Hope this information is helpful,

- Ingrid

Finally, here is the AARP letter to Congress, making their pitch to help out retirees in any stimulus package.

AARP Letter to Ways and Means / Energy & Commerce Chairs

Representatives Rangel, Camp, Waxman and Barton:

On behalf of AARP’s 40 million members, we write to commend you and your committees for developing a wide-ranging legislative recovery package, the scope of which reflects the gravity of this economic crisis. We have requested many of the proposals you have included in your legislative summaries, and strongly supports their swift enactment. We are very pleased that the legislation includes funding for Medicaid, health information technology, health care effectiveness research, nurse and primary care training, and affordable health insurance via Medicaid and subsidized COBRA for those who lost health coverage along with jobs.

In addition, we agree that it is critical to extend and increase unemployment benefits; augment Food Stamps and other nutrition supports; provide substantial funding for infrastructure projects that expand mobility options, give priority to repair of existing roads and bridges, and create new and sustainable "green" jobs; and provide greater funding to the Social Security Administration at a time of significant caseload increases.

As this process moves forward, however, we urge that a few additional measures be included to strengthen your legislation. We are concerned that many retirees and the disabled who are no longer working are ineligible for a Make Work Pay credit, and we urge that a Social Security payment be made available to them. We also urge that you require states to not cut benefits in order to receive additional Medicaid funding and that you provide homeowners facing foreclosure the option of preventing the loss of their homes through judicial modification of their mortgages in bankruptcy.

Social Security Payment for Retirees and the Disabled

AARP supports efforts to provide a credit against payroll taxes for workers as a means of providing tax relief during these difficult economic times. Almost half of AARP’s members work, and would benefit from this proposal. In addition, we also support your proposal to provide an additional Supplemental Security Income payment to the neediest older and disabled individuals.

However, we are very concerned that millions of retired and disabled individuals – many of whom were initially left out of stimulus relief last year—will be ineligible for either a Make Work Pay credit or an additional SSI payment. At least 26 million individuals age 65 years and older no longer work, but would otherwise be income eligible to receive a Make Work Pay credit. Equity calls for providing these individuals with some level of assistance, especially given that many of them have suffered significant economic harm during the past year and may be in dire straits financially. Therefore, these individuals are likely to spend additional funds immediately. An additional payment using the Social Security disbursement system would greatly aid these individuals and would treat them on par with workers who are struggling in this economy and eligible for a Make Work Pay credit.

Medicaid and Health

We are very pleased that the legislation would give states a temporary increase in Medicaid matching funds. States desperately need this money to help the growing number of Americans who cannot afford health care on their own at a time when revenues are plummeting and health care inflation continues to spiral out of control. We are pleased that it requires states to not cut Medicaid eligibility standards, methodologies, or procedures; includes additional funding for territories; and extends the moratorium on harmful Medicaid regulations.

However, given the proposed Maintenance of Effort definition, we have grave concerns that the bill would not prevent cuts in so-called "optional" benefits that are essential for many older Americans. This is important because 90 percent of Medicaid long-term care and virtually all home and community-based services (HCBS) that keep people at home and out of nursing homes are "optional" benefits that states can cut at will We strongly urge that states be required to maintain benefits as well as eligibility in order to prevent cuts in these vital services. We also support an increase in matching rates for HCBS, which would help individuals now on waiting lists get the services they need, create jobs, encourage states to expand access to HCBS, and preserve gains states have made in this area.

In addition, we strongly support provisions allowing states to cover unemployed individuals and their families in Medicaid with a 100% federal match, and extending subsidized COBRA to those who have lost health insurance along with their jobs. Allowing people 55 and older to keep subsidized COBRA is particularly important, as this is the fastest growing group among the uninsured because they are generally unable to find affordable coverage on their own.

Housing Assistance

The stimulus bill should allow for judicial modification of home loans – allowing bankruptcy judges to modify home loans for primary mortgage debt, as they can already do for any other form of securitized debt, including investment properties, vacation homes, and yachts. In addition, the stimulus should include a foreclosure deferral period for struggling borrowers who continue to make a good-faith effort to pay their mortgage, allowing them time to either work with their lender or servicer to modify the terms of their existing mortgage or refinance with a new, more affordable loan (including loans under the Hope for Homeowners program).

A recent AARP Public Policy Institute study found that, in the last six months of 2007, nearly 700,000 homeowners age 50 or older were either delinquent in their mortgage payments or in foreclosure, representing 28 percent of all delinquencies and foreclosures of primary mortgages during that period. The study found a high correlation – roughly twice the national rate – between older homeowners with little or no equity in a home and likelihood of foreclosure. In 2006, some 2.3 million households headed by persons age 50 or older had less than 20 percent equity in their homes. Since then, housing prices have fallen a further 20 percent and are expected to fall at least 10 percent next year. Greater numbers of older homeowners will face possible default or foreclosure in the coming year.

AARP is encouraged by your efforts to address the current economic crisis. We urge you to pass legislation as soon as possible to promote an economic recovery and to provide assistance to people of all ages hardest hit by current economic conditions. If you have any further questions, feel free to call me, or please have your staff contact Elaine Ryan at 202-434-3789.


William D. Novelli

Chief Executive Officer

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